Procedural Posture

Plaintiff employee sought review of a Court of Appeal (California) decision that affirmed the grant of demurrer by the trial court, affirming the decision of defendant Department of Health Services to terminate plaintiff’s employment and barring plaintiff from civil claims for damages arising from wrongful employment termination other than those pursuant to workers’ compensation law.

Table of Contents

Overview

Defendant Department of Health Services allegedly improperly terminated plaintiff employee. After exhausting administrative appeals, plaintiff sued in superior court. The superior court dismissed the case ruling the exclusivity provisions of the workers’ compensation law barred plaintiff’s causes of action. The issue was whether the exclusive remedy provisions of the workers’ compensation law barred other civil damages claims arising from wrongful employment termination, where the complaint included allegations of physical disability resulting from the termination. On appeal, the court reversed the judgment as to the wrongful termination in violation of Cal. Gov’t. Code § 19683 (repealed 1982) cause of action and the violation of fundamental public policy cause of action. The court held that disabling injuries, whether physical or mental, arising from termination of employment were generally within the coverage of workers’ compensation and subject to the exclusive remedy provisions. The exception was unless the discharge came within an express or implied statutory exception or the discharge resulted from risks reasonably deemed not to be within the compensation bargain. The parties were counseled by a corporate attorney for the civil litigation.

Outcome

The court affirmed in part and reversed in part the judgment of the court of appeal because disabling injuries arising from termination of employment were subject to coverage of workers’ compensation, except discharge resulting from express or implied statutory exception or from risks reasonably deemed not to be within the compensation bargain. The matter was remanded for consideration of those issues not previously determined.

Defendant builders appealed an order from the Superior Court of San Bernardino County (California), which denied the builders’ motions to compel arbitration in construction defect cases brought by plaintiff home buyers.

Overview

The builders provided an application for an express limited warranty and induced the buyers to sign it by telling them that it was a bonus and gave them extra protection. The warranty included arbitration provisions that purported to require arbitration of disputes arising from or related to not only the warranty, but also the home, the sale of the home, and the arbitration provisions themselves. The trial court ruled that the agreement was unconscionable. The court held that because the buyers were claiming that they never knowingly agreed to the arbitration provisions, the trial court and not the arbitrator had to resolve the unconscionability claim. Under such circumstances, the arbitration provisions could not be separately enforced under the severability doctrine of the Federal Arbitration Act, 9 U.S.C. § 1 et seq. The court found the arbitration provisions to be unconscionable because they were contained in a contract of adhesion and violated the buyers’ reasonable expectations. Although the application form contained a recital that the applicant had read a sample copy of the warranty booklet, Evid. Code, § 622, was inapplicable because the contract was an adhesion contract.